EMERGING MARKETS WEEK-Peppering of data amid US mortgage bailout

By Daniel Bases

NEW YORK, Sept 7 (Reuters) - Investors face a week of inflation and economic growth data plus a spate of central bank interest rate decisions in emerging markets, but Friday's grim U.S. jobs data is likely to color buy or sell decisions.

However, they may take solace from Sunday's U.S. government takeover of mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) to backstop a deteriorating housing market that threatens the global economy.

A takeover of the mortgage lenders would pay dividends globally. Ensuring the health of the U.S. housing market, a central element of the world's largest economy, would give investors confidence that a major downturn in economic activity was being avoided. (For related stories click on [ID:nN07417631]).

U.S. Treasury Secretary Henry Paulson said Fannie Mae and Freddie Mac were so large that "a failure of either of them would cause great turmoil in our financial markets here at home and around the globe."

Deteriorating confidence in the markets has pushed yield spreads between sovereign emerging market debt spreads and U.S. Treasuries to a three-year high 11EMJ and emerging market stocks to a 17 month low .MSCIEF.

Although inflation data and central bank meetings will pepper the week's news flow, the sharp drop in commodities prices is sending signals that a struggling global economy is now the dominant factor.

These concerns were exacerbated by the U.S. jobs report showing unemployment hit a five-year high of 6.1 percent and a U.S. Federal Reserve report showing a slowing economy and sustained inflation pressures, although prices increases have slowed and even declined in several industrial commodities.

"I think that right now everybody is more worried about growth ... The jobs numbers and the Beige Book all painted very bleak pictures," said David Spegel, global head of emerging markets strategy at ING in New York.